Last Updated on: 06/08/2024
TODAY: Tuesday, 06th August, 2024
USD/INR:
INR likely to open around 83.75
A wave of risk aversion is sweeping markets, triggered by the sharp fall in USDJPY (carry trade unwind) and worries about deepening US economic slowdown. Dollar remains stable, and is torn between safe-haven demand and the possibility of sharper rate cuts from the Fed. The sharp fall in USDJPY has resulted in a large carry trade unwind, and the Friday’s jobs report sowed concerns about a recession in the US and compounded the fragile risk appetite. As we write, the Japanese Topix Index is down 7%+ and Nikkei is down 5%+.
Friday’s US jobs data showed just 114k against 175k expected, with the unemployment rate jumping to 4.3%. The wage growth also slowed, prompting concerns that the labour market is unwinding fast. US yields fell after the jobs data and the Dollar weakened. The Dollar Index is now at 103, with EUR at 1.0920. GBP at 1.2790 and JPY at 145.00. The US 10y is down to 3.72%, and the possibility of a 50 bp cut in the coming couple of FOMC meetings is now significantly high. Brent is down to 77 now, indicating market concern about global economic slowdown.
MAJOR WORLD CURRENCIES:
USD:
The dollar selling follows on data showing a sharp cooling in the U.S. jobs created in July on Friday, with U.S. Treasury yields dropping significantly as traders began factoring a hard landing for the U.S. economy from the prolonged period of elevated interest rates.
Traders now fully expect the U.S. Federal Reserve to cut interest rates in September, and are looking for more substantial cuts than the around 50 basis points of reductions that had previously been priced in this year.
Wells Fargo, for instance, now projects two 50 basis-point rate cuts at the Federal Open Market Committee meetings in September and November.
This prediction marks a substantial shift from earlier forecasts due to emerging economic indicators, with recent data prompting worries about the economy.
GBP/USD:
Over the weekend, several news outlets reported that Iran was preparing to attack Israel. Investors grow increasingly worried about a deepening conflict in the Middle East and it's potential negative impact on markets. Early Monday, the UK's FTSE 100 Index is down more than 2% on the day and US stock index futures lose between 1.6% and 4%, reflecting the intense flight to safety.
In the second half of the day, the ISM Services PMI data for July will be featured in the US economic docket. Investors see the headline PMI rising into the expansion territory above 51 from 48.8 in June. A disappointing PMI print could make it difficult for the USD to find demand and help GBP/USD find support. Nevertheless, the pair could struggle to gain traction unless risk mood improves in a noticeable way.
EUR/USD:
The EUR/USD pair prints a fresh seven-month high around the psychological resistance of 1.1000 in Monday’s American session. The major currency pair strengthens as the US Dollar (USD) plummets amid growing speculation that the Federal Reserve (Fed) could announce emergency rate cuts as risks have widened to both components of dual mandate.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, plunges to 102.20. Meanwhile, an asset-specific action has observed in global markets. Global equities continue to face sell-off, while risk-perceived currencies have bounced back strongly due to weakness in the US Dollar.
Gold
Gold fell almost 3% on Monday, but drop was mainly result of increased volatility in the market, as trades liquidated profitable positions on gold to get extra money to cover shortages on margin calls from losses in the stock markets.
Although today's fall is significant and the biggest daily loss in two months, I don't see reasons for panic, but instead, expect these dips to provide better buying opportunities.
Near-term price is still within the range of past couple of weeks and far from key supports at $2290 zone, suggesting that larger bulls remain in play and current weakness seen as temporary and limited.
USD/INR as on 05th August, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.7880
84.1647
83.7525
84.0180
Forward premium (%) as on 05th August, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.09/1.22
1.36/1.41
1.64/1.66
2.09/2.10
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 06th August, 2024, @ 09.00am)
Cash/Tom: 0.05/0.75 Cash/Spot:0.10/1.50
Tom/Spot: 0.05/0.75 Spot/Next: 0.05/0.75
Cash Date: 05.08.2024
Tom Date: 06.08.2024
Spot Date: 07.08.2024
Outlook for the day 06th August, 2024
Rupee expected to trade in range of 83.62-83.76
MAJOR WORLD CURRENCIES: as on (05th August, 2024)
CURRENCY
GBP
1.2805
1.2817
1.2706
1.2773
EUR
1.0921
1.1008
1.0891
1.0952
AUD
0.6505
0.6520
0.6346
0.6495
JPY
146.50
146.56
141.66
144.17
CHF
0.8588
0.8594
0.8430
0.8523
XAU
2442.15
2458.60
2364.19
2407.65
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 05th August, 2024
USD/INR: 83.85 [FXIR]
Against
USD
INR
1 EUR =
1.0964
91.9331
1 GBP =
1.2766
107.0429
100 JPY =
142.31
58.9207
1 AUD =
0.6443
54.0246
1 CHF =
0.8481
98.8681
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 05th August, 2024
Gold ($/oz)
2469.85
Silver ($/oz)
28.95
Stock Indices
Index Close
02nd July, 2024
05th August, 2024
BSE Sensex
80981.95
78759.40
NSE Nifty
24717.70
24055.60
Dow Jones
39737.26
38703.27
NASDAQ
16776.16
16200.08
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
06/08/24
10.00 AM
Cash Rate
y/y
02.00 PM
Construction PMI
BOJ Policy Rate
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